Vilsack endorses trade agreements

• At the end of the day, increased exports mean more opportunities for small businesses owners and for folks who package, ship and market agricultural products.
• It means better incomes for the nation's farm families and more jobs across rural America.

May 13, 2011

Agriculture Secretary Tom Vilsack spoke before the U.S. House Committee on Agriculture this week:

"Mr. Chairman, members of the Committee, I am pleased to appear before you today to discuss the pending trade agreements with South Korea, Colombia, and Panama, U.S. agricultural exports, and the capacity of exports to create economic opportunities in our rural communities.

"Over the past two years, as the nation has rebounded from the worst recession in decades, American agriculture has helped lead our recovery by shattering trade records and creating jobs. In fiscal year 2011, U.S. agricultural exports are forecast to reach a record high of $135.5 billion — up nearly 27 billion from the prior year — with a record trade surplus of $47.5 billion. They will help support more than 1.1 million jobs nationwide. Just yesterday, we learned that U.S. farm exports reached an all-time high of $75 billion in first half of fiscal year 2011. That is up 27 percent from the same period last year, and keeps us on track to hit the forecast.

"These three trade agreements will create jobs. Through agricultural exports alone, they will yield over $2.3 billion in sales and help support more than 19,000 American jobs in agriculture and related industries.

"The Korea agreement is a trade opportunity we cannot afford to pass up — worth an expected $1.9 billion annually to ag producers. Sixty percent of the items we currently trade to Korea will be duty free immediately, including corn, soybeans for crush, cotton, cherries, and orange and grape juice. Other commodities — such as meat, poultry and dairy — will see tariffs and duties reduced over a period of time, creating tremendous opportunity for us to grow our export opportunities.

"The Colombia Trade Promotion Agreement also contains good news for U.S. agriculture. Currently, no U.S. agricultural exports enjoy duty-free access to Colombia, with most applied tariffs ranging from 5 to 20 percent. But on day one of implementation, U.S. exporters will receive duty-free treatment on products accounting for almost 70 percent of current trade. When implementation is complete, we expect it to increase our agricultural exports by 44 percent — an additional $370 million per year.

"In Panama, U.S. agricultural exports have been on the rise, growing to over $450 million in 2010. Our agreement with them will continue this progress — with an additional $46 million in annual sales upon full implementation. Tariffs on 68 percent of Panama's agricultural tariff lines, accounting for more than half of current U.S. trade by value, would be eliminated by the agreement.

Must work together

"It is critical for U.S. agriculture that we work together to move the three pending trade agreements as part of our broader trade agenda. Today, Korea, Columbia and Panama have approved or are negotiating trade agreements with a host of other nations, including the E.U., Canada, Mexico and New Zealand. Completing these three trade agreements will level the playing field with some competitors, and secure better markets for U.S. agriculture ahead of others.

"These trade agreements represent an important cornerstone of our strategy to continue to increase agricultural trade — but USDA is involved in a host of other efforts.

"Thanks to the President's National Export Initiative, which challenged U.S. businesses to double all exports by the end of 2014, USDA is reaching out to producers and agribusinesses, especially small- and medium-sized enterprises, with information about how to tackle the export market and financing to make it happen. Whether it means helping small businesses attend trade shows, or directly connecting U.S. companies and trade groups with foreign customers by bringing them to the country, we are working to expand opportunities for agricultural trade.

"We have focused many of our efforts in developing countries with a growing middle class and increased purchasing power for high quality U.S. agricultural products. It is one of the reasons we sent trade missions to Indonesia and Peru this year, and why China became our biggest export market last year.

"We are engaged in non-stop efforts to break down sanitary and phytosanitary and technical barriers, advocating forcefully for the interests of American agriculture with other nations. USDA has also addressed export barriers to U.S. specialty crops, facilitating new exports and preventing disruptions that would have affected hundreds of millions of dollars in exports in Indonesia and the European Union.

"When I travel the country — especially rural America — and talk about trade, the message I hear is simple: We need an economy that makes, creates, and innovates. And we need a nation that exports.

"That is why I am so proud of USDA's work to increase exports and hopeful that Congress will act swiftly to approve these trade agreements. At the end of the day, increased exports mean more opportunities for small businesses owners and for folks who package, ship and market agricultural products. It means better incomes for our nation's farm families and more jobs across rural America.”